Atlanta’s Largest Law Firm Comes Out on Top with Strategic Cost Cutting

atlanta_ga.jpgSince the economic downturn in 2008, large law firms all around the country have downsized office space as part of overall efforts to reduce operating costs. Firms in Atlanta are no exception and today continue to cut expenditures. Unable to forecast when business will pick up and return to levels seen in the mid-2000s, even the City’s largest firms that have held on to business with longstanding clients are cautious to expand and sign on for more office space. The competitive advantage rests with firms that are able to marry low overhead with the best talent, as clients continue to reduce spending on legal counsel.
In 2010, Atlanta’s largest law firm, Alston & Bird LLC, began negotiations on an agreement to downsize the Firm’s office space from 435,000 to 300,000 square feet. The reduction in space was structured so that the Firm’s offices would relocate from space in two separate buildings at One Atlantic Center and Atlantic Center Plaza, to space in only One Atlantic Center. The developer Daniel Corp. was reported to have proposed construction of and relocation to a new office tower, but financing was difficult for the project and it was rejected. In the end, Hines Real Estate Investments, Inc, the owner of One Atlantic Center won the bid. Unwilling to give up its longtime client of 20 years to another building owner or developer, Hines offered Alston & Bird a winning deal that the Firm could not refuse.
Alston & Bird LLP will complete the transition to the new office space at One Atlantic Center in 2012. The term of the new lease spans 18 years and the contract gives tenant improvement allowances of between $50 and $80 per square foot. Construction on the new space between the 35th and 50th floors will begin in 2011. With the reduction in office space under the new agreement, Alston & Bird stands to save between $10 and $20 million over the life of the loan. But the law firm isn’t the only winner, since the agreement leaves One Atlantic Center at 90% occupancy. Not bad for Atlanta, that at 27% has the nation’s highest in-town vacancy rate. It is now up to the deal’s loser, Atlantic Center Plaza, to find tenants to fill the 200,000 square feet that will be left vacant by Alston & Bird.
In 2010, Elaine M. Russell created www.LawSpaceMatch.com, a service that matches lawyers seeking to sublet space with unoccupied office space at compatible law firms around the country. Elaine M. Russell is a corporate and business attorney representing clients throughout Georgia. Elaine’s office is located in the Buckhead section of Atlanta.
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Taken from: Alston & Bird consolidates in move to One Atlantic